Chery, Magneti Marelli to form partnership in gearbox components

Shanghai. September 10 (Gasgoo.com) - Fiat SpA said its component unit Magneti Marelli has reached an agreement with China's Chery Automobile Co Ltd to set up a joint venture to produce hydraulic gearbox components in China.

Under the agreement, Magneti Marelli will afford a majority part of fund and hold a majority stake in the joint venture, which will supply Chery with components for automated manual transmission (AMT) systems. Financial details of the deal were not disclosed.

"The deal has a particular strategic relevance because automatic gearboxes, using different technologies, start to be requested by the public," said Magneti Marelli CEO Eugenio Razelli.

AMT is an electric/hydraulic mechanism that automates a manual gearbox with lower costs compared to traditional automatic gearboxes.

Fiat said in a statement that the joint venture will be in operation by spring 2008, supplying Chery and other auto makers with AMT.

Last month, Chery and Fiat signed an agreement for a joint venture to produce cars for the Chinese market, marking an important step in improving Fiat's prospects in this market.